Title: GBP/USD pares US inflation-led gains near 1.2200, UK ministers’ meeting with energy firms, GD
August 11, 2022 12:36 AM ET
GBP/USD continues to be under pressure around the 1.2200 level ahead of the London opening on Thursday, after posting its strongest daily rise in two months the previous day.
Post-inflation weakness in the U.S. dollar pleased buyers of the cable pair on Wednesday. However, recent weakness in the quote may be related to mixed comments from Fed policymakers and cautionary sentiment ahead of the critical meeting between UK ministers and energy companies. Another irritant for the bears is the news about the China-US trade war, COVID, and Taiwan.
The Guardian reports that "Government ministers will meet energy companies on Thursday as the Treasury considers tightening the 25% levy on North Sea oil and gas company profits announced in May." It continues, "Chancellor of the Exchequer Nadhim Zahawi and Business Minister Kwasi Kwarteng will meet with energy bosses to discuss rising energy bills for households as oil and gas companies rake in billions of pounds in profits."
Elsewhere, San Francisco Fed President Mary Daly was recently reluctant to declare victory over inflation, even after the U.S. Consumer Price Index (CPI) fell to 8.5% in July from 8.7% expected and 9.1% previously. In doing so, policymakers joined Minneapolis Fed President Neel Kashkari and Chicago Fed President Charles Evans.
Earlier, Fed Chairman Kashkari had said he saw nothing to change the need to raise the Fed funds rate to 3.9% by the end of the year and to 4.4% by the end of 2023. In addition, Fed policymaker Evens said, "The economy is almost certainly a little more fragile, but it would take something adverse to trigger a recession." Evans also called inflation "unacceptably" high.